The government is revising its subsidized microloan program by expanding sectors under coverage to widen the scope of the program, as less than a quarter of its target has been achieved.

A more relaxed rule will allow banks that participate in the program, called the people's business credit (KUR), to channel the loans to sectors aside from the existing ones, according to Braman Setyo, director general of KUR at the Cooperatives and Small and Medium Enterprises (SME) Ministry.

The existing sectors covered in the KUR program are trading, plantation, maritime and agriculture.

'Banks have suggested that the government expand the sectors, but we need to assess whether the relaxation will help them achieve the Rp 30 trillion [US$2.07 billion] target this year,' Setyo told reporters after a meeting on KUR at the Office of the Coordinating Economic Minister on Monday.

Cooperatives and SME Minister Anak Agung Gede Ngurah Puspayoga said banks had also suggested a relaxation in terms of prospective customers to boost loans.

For instance, Puspayoga said banks saw the possibility of spouses of employees with a stable monthly income gaining eligibility to receive KUR loans.

'Another suggestion was extending the loan tenure up to 10 years for the plantation sector,' Puspayoga added.

The government had set a target for KUR disbursement to reach Rp 30 trillion this year, but as of September only Rp 4.5 trillion had been disbursed.

State-owned Bank Rakyat Indonesia (BRI) has so disbursed Rp 3.5 trillion, although it initially hoped to channel Rp 21 trillion, considering that most of the lender's portfolio went to micro and SME segments.

Two other state lenders, Bank Mandiri and Bank Negara Indonesia (BNI), were expected to disburse Rp 3 trillion each, while the remaining would be channeled through regional banks, which were still awaiting approval from the Financial Services Authority (OJK).

Based on the evaluation, Puspayoga said the government had revised down the target to between Rp 19 trillion and Rp 20 trillion, which he claimed as 'more realistic owing to the delayed start of the program in mid-August.'

Boosting KUR is expected to stoke growth in bank lending activities, which have slowed this year along with the overall six-year low economic growth.

Puspayoga added that KUR loans would be able to reach Rp 100 trillion next year as the government planned to halve the interest rate to 9 percent from the current 12 percent, which had been cut from 22 percent and 24 percent, previously.

BRI president director Asmawi Syam said the bank was stepping up its efforts to accelerate loan disbursement in the remaining three months of the year as it was able to channel Rp 3.5 trillion in the last one month and 18 days.

Meanwhile, BNI president director Achmad Baiquni said the bank had disbursed at least Rp 159 billion in KUR loans as of September and was seeking various ways to achieve its target of Rp 3 trillion by the end of the year.

'We already opened outlets that were once specialized in seeking only funding and added more resources to support the program,' Baiquni said.